For the third consecutive year, Gov. Bobby Jindal is treating the Ernest N. Morial Convention Center as his (and the state's) piggy bank. He wants to crack it open and leave an IOU for $50 million to prop up his proposed 2014-2015 budget, which lawmakers are now considering.
Jindal justifies the raid by saying the money is part of over-collections, meaning its temporary loss won't affect the Convention Center's ability to cover projected expenses. Essentially, he's betting the money won't be missed, at least for the time being.
Strictly speaking, the governor's team cannot spend that money any way it pleases — even if it wants to inject the dollars into the budget to cover ongoing state operations.
There are restrictions on how cash can be disbursed from the Convention Center and other alleged agency over-collections that Jindal hopes to raid, including $32 million from a fraud initiatives fund, $40 million from the Louisiana Housing Corporation (that figure may be lowered to roughly $27 million in the coming weeks, sources say) and $10 million from a debt recovery program. Altogether it's $132 million.
Under the state constitution, that $132 million can only be used for certain needs, such as debt retirement, coastal protection and deposits into the so-called rainy day fund. Of course, in Louisiana, such limitations are mere speed bumps when the budget vehicle is being driven by experienced legislators and willing governors.
For example, the rainy day fund would get $25 million of the $132 million, according to Jindal's budget plan, while $51 million would go to the Coastal Protection and Restoration Fund and the rest toward paying down the state's debt.
The $51 million to be deposited in the coastal fund, which is remarkably close to the amount being skimmed from the Convention Center, would be yanked out immediately and redistributed as follows: $39 million to the state Board of Regents, $6.5 million to the Office of Elderly Affairs, $4 million to the state Department of Education and $1.4 million to state libraries.
And there you have it: the legislative and gubernatorial equivalent of money laundering, only it's perfectly legal — or so they say.
Administration officials contend there's no net loss to the coastal fund. Of course, there's no net gain, either. Which raises the question of why the fund is being used as a pass-through. The answer is that the governor's proposed budget needs gimmicks to pass muster. Without this game of fiscal three-card monte, the state might be forced to spend only what it takes in each year. (Gasp!)
In regard to the Convention Center, the Jindal administration isn't exactly robbing the bank. The governor promises to repay the money — in bonds (read: IOUs) — in $25 million increments over the next three years. On its face, that's a $25 million gain for the Convention Center ... if the money gets repaid. But that also says something about how desperate the budget situation is this year.
When the state made it past December without mid-year budget cuts for the first time in several years, many took it as a sign that the heady days of yesteryear had returned. In truth, the absence of cuts reflected as much the fiscal restraint of lawmakers last year, as in the fiscal hawks and their push to limit use of one-time money on recurring expenses, as it did the state's overall economic health.
House Appropriations Chairman Jim Fannin, R-Jonesboro, urges caution. "The Legislature is going to have to be careful about getting on a spending binge," he said. "The normal stream of revenue is not supporting what we have in the budget right now." Senate Finance Committee Chairman Jack Donahue, R-Mandeville, agreed, adding, "Balancing the budget will prove to be challenging."
The budget starts in the house, and on their second day at the Capitol last Tuesday, lawmakers began kicking the tires on Jindal's proposed $25 billion spending plan. Despite the later-than-usual start, Fannin said the session's longer time frame — adjournment is set for June 2 — allows sufficient time.
Donahue's committee likewise will scrutinize the state's getting and spending plan. "Everybody likes to follow the money," Donahue said.
True enough — but the state is fast running out of places to find it.